Chapter 1 – Overview of marketing: developing customer value, satisfaction, relationships and experiences through marketing

Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.

Marketing Mix = 4PsProduct, price, place, promotion

The concept of satisfactionProducts are solutions to consumer needs and wants

Basic requirements for successful marketing to occur1. Two or more parties with unsatisfied needs2. A desire and ability on their parts to satisfy these needs3. A way for the parties to communicate4. Something to exchange

Marketing discovers and satisfies consumer needs and wants- Discover consumer needs but scrutinizing consumers

o To understand what they needo To study industry trendso To examine competitor’s productso To analyze the needs of a customer’s customer

- Satisfy consumer needs by finding the right marketing mix (4Ps)- Cannot satisfy all consumer needs so focus on target markets

Five different orientations in the history of North American business

Market orientations focus on creating customer value, satisfaction, and customer relationships by:

- Continuously collecting data about consumers’ needs and competitors’ capabilities- Sharing this information throughout the organization- Using the information to create value, ensure customer satisfaction and develop

customer relationships

Chapter 1 – Overview of marketing: developing customer value, satisfaction, relationships and experiences through marketing

Why build a relationship with customers?To retain customers over time (cost effective way for firms to grow in competitive markets)

How to build customer relationships?Who are your customers?What do your customers value?What do your consumers want to buy?How do they prefer to interact?

Examples of customer relationship strategiesThe process of building and developing long-term relationships with customers by delivering customer value and satisfaction is called customer relationship management (CRM).eCRM – a Web-centric, personalized approach to managing long term customer relationships electronically:1) Interactive marketing

- Involves 2-way buyer-seller electronic communication in which the buyer can control the kind and amount of information received from the seller

- For it to be effective, companies need to listen, understand and respond to their customers’ needs

- Marketers must treat customers as individuals and empower them too Influence the timing and extent of the buyer-seller interactiono Have a say in the kind of products and services they buy, the info they receive

and, in some cases, even the prices they pay

2) Customer experience management- Managing the customers' interactions with the organization at all levels and at all touchpoints (direct and indirect contacts of the customer with an organization) so that the customer has a positive impression of the organization, is satisfied with the experience, and will remain loyal to the organization. In essence, it is about experience-based differentiation

Chapter 2 – Strategic Marketing

Describe strategic planning and strategic marketing process1. Describe why business, mission, culture, and goals are important in organizations.2. Explain how organizations set strategic directions by assessing where they are- SWOT. 3. Explain how the marketing mix elements are blended into a cohesive marketing program.4. Understand BCG portfolio matrix, and product-market growth strategies.

Strategic MarketingProcess whereby an organization allocates its marketing mix resources to reach its target mix.The objective is to maintain a fit between the organizations objectives and resources and evolving market opportunities.

Strategic Marketing Process

SWOT AnalysisInternal:Strengths – things the company does wellWeaknesses – things the company does poorly

Area for internal analysis: Production costs Marketing skills Employee capabilities Financial resources Company/brand image Equipment used

External:Opportunities – conditions in the external environment that favor strengths. (Not strategies!)Threats – conditions in the external environment that do not relate to existing strengths or favor areas of current weakness and may hinder the strategy/organization

Area for external analysis (environmental scanning):

Marketing Strategy

Product

Promotion

Distribution

Price

Marketing Mix

Business Mission

StatementObjectives

Situation or SWOT

Analysis

ImplementationEvaluation

Control

Target Market

Positioning

Chapter 2 – Strategic Marketing

Current marketing mix Customer loyalty/retention Level of expertise and knowledge

Examination of macro-environments Social Demographic Economic Technological Political/legal Competitive

BCG Matrix

Ansoff theory (Market-product growth strategies)

Chapter 2 – Strategic Marketing

Chapter 3 – Marketing environment and marketing ethics

Influences on marketing strategiesTrends in external environment will justify your marketing strategies

External environments

Competitiono Monopoly – one firm serves the market (e.g. SAQ)o Oligopoly – a few firms serve most of the market and control part of

the mix of the smaller competitor (e.g. Esso)o Monopolistic competition – many firms offer different products that

answer similar need (e.g. McDonalds vs. Burger King, Zara vs. H&M)

o Pure competition – no firm has power over the other (stock market, free software)

Examples of barriers to entry:

Product:

Unknown brand Need to change consumer

behavior

Place

No manufacturing capacity Difficult to convince retailers to

carry product Suppliers reluctant to change Established suppliers

Price

Cannot buy in bulk – no economy of scale

Competition has a low cost strategy

High costs (variable and fixed) Low margin per item

Promotion

- Large advertising is required (car and cosmetic industries)

Oligopolistic competitive environmentMarket is saturatedIndustry standards are too highHighly regulated industrySpecialized workforce

Economyo Shift from the secondary to service sectoro ½ of Canadians earn a middle class income (37 000)o Canadian consumer debt level 148%o More discretionary income for high-end goods and serviceso Scarcity of natural resourceso Intensity of natural disasters: earthquakes, tsunami, ice storm

Chapter 3 – Marketing environment and marketing ethics

o Low interest rateso High unemploymento Stagnant GDPo Low market growth in NAo High variation in stock market valuations (facebook)o Changes in the value of the Canadian dollaro Consumer’s reactions to inflation: search for lowest prices, rely

on coupons and sales, delay large purchases, buy smaller quantities at one time, seek higher quality products, look for substitutes

Technologyo Influence

Database managementDirect distribution channels, e-marketing and e-commerceOnline and other interactive communications (blog, twitter, RSS)Increase of product obsolescenceMiniaturization of computing technologyGrowth of wireless technology – security issuesDecrease of government funding in R&D, increase of private funding

Socio-demographic and culturalo Demography = study of characteristics of the population

Size and age, location, spending power and wealth, level of education, family formation, multiculturalism, lifestyle and values, social concerns

o Growing social trends Rural life in mega cities: trees, access to local markets Increase donation, philanthropy managed as business Personal branding Facebook keeps growing – revealing personal information to

people we don’t really know Clothing – vintage, unique, recyclable Pay for what used to be free – dog walking, sleep next to

me, give me a hug

Chapter 3 – Marketing environment and marketing ethics

o All cultures will include:

o North American changing values From 1970s and 1980s

Environmentally aware, trusting, indulgent, image driven, conspicuous consumption, brand loyal, traditional marriage

To 2000s and 2010sSocially responsible, skeptical, health and wellness, pessimistic, value driven, strategic consumption, brand disloyal, non-traditional marriage

o Socio-demographic Aging population Rising affluence Changes in ethnic composition Disparities in income levels More women in the workforce Increase in temporary workers Greater concern for fitness, health and the environment Postponement in family formation Various family types (DINKS, nuclear, multigenerations,

reconstructed)o Generation X, Y, boomers, traditionals

Generation Y: 1979-1994Techno friendly, optimist, personalization

Generation X: 1965-1978Pessimist, savvy, cynical consumers

Baby boomersRealistic, seek convenience, youth, individualism

Traditionalist: born prior to 1945

Political and legalo Protection of certain industries (oil, culture, location of head office)

Aboriginal land claims settlementsDeregulation

Chapter 3 – Marketing environment and marketing ethics

Labour laws (wages, health/safety)Legislation on corporate governancePolitical stabilityIncrease in local taxation policiesForeign trade regulationsSocial welfare policies - fundingCanadian competitive act (10$)

o Example of laws that impact No smoking in public area Import quota limits on clothing industry were removed Lobbying toward the elected political party (sugar, tobacco,

fast food, gasoline) No phosphate in detergents NAFTA, EU, tariffs and non-tariff barriers

Chapter 9 – Segmentation, Targeting and Positioning

1) Market = group of individual or organizations with needs, wants, ability to buy and desire to buy

2) Segmentation = dividing a large market (mass market) into smaller homogeneous markets (segments) based on commonalities

What are some approaches to segmenting a consumer market? (p232 table)Demographic

Age, gender, family size, era (baby boomer, generation x), income, family status, ethnicity, education, occupation, home ownership

GeographicalRegion, city, census, density, climate

BehaviouralBenefits sought – low price, high quality, environmental safety, convenienceUsage/loyalty – light/medium/heavy user, user status (gold, silver, bronze)Decision making – individual, family, group; product knowledgeType of buy – first time, re-buy, high or low involvement

PsychographicBased on personalities, lifestyles, activities, interests, opinionsE.g. conservative and liberal, variety of products at gym (interested in fitness, will also be interested in eating healthy for e.g.)

Targeting strategiesEvaluating the attractiveness of each segment and selecting one or more segments to serve

How to decide which segments to target?

3) Positioning = refers to the place an offering occupies in the consumers’ minds on important attributes relative to competitive products

Most common positioning strategiesBrand leadership (visa- all you need)Head-on challenger (Burger King challenges McDonalds)Innovation (red bull)Product or market differentiation (maytag- no servicing required)

Chapter 3 – Marketing environment and marketing ethics

Lifestyle (apple)

Perceptual Map = tool to display the location of the brands in the minds of the consumers

2 axes labeled with attributes that are relevant to the consumerPlot your product and competition

Chapter 5 – Consumer behaviour